The Indian Supreme Court dismissed a petition filed by 54 affected users of the 2024 WazirX hack on 16 April 2025. The victims, who lost their funds in the major ₹2,000 crore ($234 million) cyberattack, were hoping for urgent relief in the matter.
However, the apex judicial body cited the absence of a clear regulatory framework for cryptocurrencies and dismissed the cases against the exchange’s management, including co-founder Nischal Shetty, along with Binance Holdings and Liminal Custody.
The victims brought the petition before a bench comprising Justice BR Gavai and Justice Augustine Masih, outlining cases of gross negligence, mismanagement of user assets, and insufficient security measures that contributed to the hack.
The Supreme Court stated it was “not inclined to entertain the plea,” and the case was dismissed at the bench. For the investors, the dismissal of the petition has left a bad aftertaste, as for many, this was their final recourse.
If the
Indian judiciary can’t act against #WazirX citing a “lack of laws & regulations”
Then why are Indian crypto users are still forced to pay 1% TDS & 30% tax on profits ?
So, are we only good enough to be taxed but not protected by laws, guidelines or clear regulations… pic.twitter.com/PVKaqO5X6U
— Ajay Kashyap (@EverythingAjay) April 16, 2025
On 18 July 2024, the now-infamous Lazarus Group, backed by North Korea, hacked WazirX. The group exploited vulnerabilities in WazirX’s multi-signature wallet system. They created fake accounts, manipulated smart contracts, and gained full control over the exchange’s funds, ultimately draining all funds.
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Supreme Court’s Rejection Of Petition Puts Spotlight On Regulatory Gaps
Following the hack in early 2024, the victims sought legal recourse and approached the Delhi High Court, to no resolution. Nine months after the hack, the Supreme Court, while dismissing the petition, stated that it is not the appropriate forum to adjudicate the matter and has emphasised that the issue falls under policy rather than judicial jurisdiction.
In their petition, WazirX users had demanded to put together a Special Investigation Team (SIT) comprising officers from the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), the Financial Intelligence Unit (FIU), the National Investigation Agency (NIA), the Central Bureau of Investigation (CBI), and the Serious Fraud Investigation Office (SFIO) to conduct an in-depth probe into WazirX and all its associated entities.
Moreover, the petition also called for an independent team of financial auditors to conduct a forensic audit of WazirX’s books, ledgers, and internal records and report back to the Supreme Court. The court, however, has advised the petitioners to approach the Union Government, RBI, SEBI, and CBI for a redressal.
Looking in on the ongoing case, market participants have noted the irony of India imposing a 30% tax on crypto gains while failing to offer recourse in case of major incidents, therefore putting a spotlight on organisations like the RBI and SEBI in this obvious case of regulatory gap.
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WazirX Might Push Fund Recovery Process To May
While the legal proceedings in India regarding this case are neither here nor there, WazirX is slowly advancing its restructuring efforts. The company has undergone a court-ordered restructuring process in Singapore after it was hacked in 2024.
The crypto exchange claims that it has secured over 90% credit approval for its fund recovery program. However, investors expect to recover only 45-50% of the funds they lost during the cyberattack.
WazirX had earlier stated its intention to begin with its fund redistribution program within a week of the court approval. However, the company’s recent blog post indicates that delays could affect the program, with users speculating that they could potentially push the timeline to May
There’s some FUD claiming that the WazirX fund distribution is delayed.
It was previously communicated that the next step after the vote is to seek court sanction of the scheme. Court hearing is scheduled for 13th May.
We’re on track and fully focused. Please ignore the noise,…
— Nischal (Shardeum)
(@NischalShetty) April 11, 2025
However, responding to social media concerns regarding these delays, co-founder Nischal Shetty clarified that the court hearing had always been scheduled for the following month.
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Key Takeaways
- The Supreme Court dismissed WazirX hack victim’s petition, citing a lack of crypto regulations.
- Investors expect to recover only 45-50% of the funds they lost during the hack.
- The Supreme Court stated that the matter falls under policy and not judicial jurisdiction.
The post Lack Of Crypto Framework In India Keeps WazirX Hack Victims From Justice appeared first on 99Bitcoins.
